Correlation Between Magnite and Luxfer Holdings
Can any of the company-specific risk be diversified away by investing in both Magnite and Luxfer Holdings at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Magnite and Luxfer Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnite and Luxfer Holdings PLC, you can compare the effects of market volatilities on Magnite and Luxfer Holdings and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Magnite with a short position of Luxfer Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnite and Luxfer Holdings.
Diversification Opportunities for Magnite and Luxfer Holdings
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Magnite and Luxfer is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Magnite and Luxfer Holdings PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luxfer Holdings PLC and Magnite is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Magnite are associated (or correlated) with Luxfer Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luxfer Holdings PLC has no effect on the direction of Magnite i.e., Magnite and Luxfer Holdings go up and down completely randomly.
Pair Corralation between Magnite and Luxfer Holdings
Given the investment horizon of 90 days Magnite is expected to generate 1.59 times more return on investment than Luxfer Holdings. However, Magnite is 1.59 times more volatile than Luxfer Holdings PLC. It trades about 0.04 of its potential returns per unit of risk. Luxfer Holdings PLC is currently generating about 0.02 per unit of risk. If you would invest 1,169 in Magnite on August 29, 2024 and sell it today you would earn a total of 493.00 from holding Magnite or generate 42.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magnite vs. Luxfer Holdings PLC
Performance |
| Timeline |
| Magnite |
| Luxfer Holdings PLC |
Magnite and Luxfer Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnite and Luxfer Holdings
The main advantage of trading using opposite Magnite and Luxfer Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnite position performs unexpectedly, Luxfer Holdings can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Luxfer Holdings will offset losses from the drop in Luxfer Holdings' long position.| Magnite vs. Capital Income Builder | Magnite vs. Direxion Daily FTSE | Magnite vs. Dodge Global Stock | Magnite vs. Collegium Pharmaceutical |
| Luxfer Holdings vs. Graham | Luxfer Holdings vs. Enerpac Tool Group | Luxfer Holdings vs. Kadant Inc | Luxfer Holdings vs. Hurco Companies |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |